Poverty in Africa isn’t History — or Destiny

Africa’s expectations were quite clear: nothing short of a comprehensive treatment of debt, trade and development finance, along with removal of the constraints that have held back the continent’s growth and progress.

(Editor’s note: This article was originally published in the Ft. Worth Star-Telegramon Monday, August 1, 2005.)

Have we made poverty history? Not quite. Actually, billions of people in Africa and around the world are likely to get pushed even further to the brink.

With great fanfare, British Prime Minister Tony Blair and President Bush, along with five other leaders of the world’s richest nations, plus Russia, came together recently in Gleneagles, Scotland. Once again, the rich world found a way to advance its own interests, pushing Africa’s demands for real reform to the dustbins.

Africa’s expectations were quite clear: nothing short of a comprehensive treatment of debt, trade and development finance, along with removal of the constraints that have held back the continent’s growth and progress. As the Group of Eight gathered, the African Union found its voice, focusing the world on the importance of complete and unconditional debt cancellation for Africa — not just some relief for a handful of countries but immediate debt write-off for the entire continent to free up scarce resources for health, education and other essential services. Africa’s expectations were amplified as activists and celebrities sought to galvanize the public conscience around the world. An estimated 2 billion people gathered in marches, embassy protests, concerts and televised events to express one sentiment: Make poverty history.

As African economist Samir Amin put it: “In a world of plenty, poverty can and must be eliminated by changing the structural imbalances that create and maintain impoverishment in Africa and around the world.” These calls for real change were largely ignored as the G-8 summit brought little more than disheartening disappointment. A comprehensive, bold package on debt, trade, and development finance didn’t materialize. Instead, the summit produced aimless rhetoric and empty promises that reinforced the rich world’s grip on economic and political power.

On debt, the G-8 fell far short of offering the full cancellation urgently needed by more than 62 countries and refused to remove the harmful conditions attached to the debt deal. As such, a paltry 18 countries — just 14 in Africa — will have some of their debts erased. A separate deal was made for Nigeria’s Paris Club debt to stem calls from Nigerian citizens for debt repudiation. However, to get the deal, countries must open their economies, removing constraints to potentially exploitative international investors, while also agreeing to privatize many core services.

The G-8, under the guise of debt relief, has found a way to impose multinational corporations on Africa’s water, electricity, education and health systems, bringing higher fees and even further impoverishment to the region. This is a raw deal that can’t go unchallenged. About $100 million a day is squeezed out of Africa in debt service payments to the rich world. This daily transfer siphons off scarce resources needed to address the HIV/AIDS pandemic and other key concerns of the continent. For much of Africa, the giant sucking machine draining scarce resources from the poor is still firmly rooted. To make poverty history, we must be sure that the debt vacuum is immediately and unconditionally turned off.

On trade, perhaps the most crucial area for development of the African continent, the G-8 failed even on rhetoric and instead proclaimed that the venue for movement on trade would be the World Trade Organization’s ministerial meeting in Hong Kong this December. The United Nations Conference on Trade and Development (UNCTAD) estimates that unfair trade rules deny poor countries $700 billion in exports every year.

What’s needed is fundamental reform of the international trading regime to end subsidies that dump rich-country products on African markets, leaving no space for African farmers and producers. Poverty will remain entrenched unless African governments exercise their right to protect fragile markets, ensure core labor, human-rights and environmental standards and secure the well-being of their citizens without penalties from the rich world. Development finance is the area that the G-8 claims to have advanced the furthest — many promises made, none of which will be implemented until each of the eight leaders is well out of office.

In 1970, these same countries made a pledge to devote a small portion of their national income, 0.7 percent — for the United States, just 0.7 cents of out every dollar in our economy — to redress global economic imbalances through development finance. Today, all we get are more empty promises, isolated from the long-neglected commitment made 35 years ago. With no new resources on offer, the rich countries maintain their firm grip on the global economy by linking development finance to imposed criteria that ensure the free access of corporations to the wealth and resources of Africa and the developing world. We will never make poverty history until this macroeconomic puppetry ends.